Obama challenges Republicans to break fiscal logjam

WASHINGTON — U.S. President Barack Obama said Wednesday that it is up to the Republicans to assure that America does not fall over the so-called “fiscal cliff” that could plunge the world into recession.

Despite Obama’s resounding election victory, the ideological struggle between Republicans and Democrats continues unabated as Obama and congress struggle to avoid a Jan. 1 deadline that will automatically impose large tax increases on all taxpayers as well as steep budget cuts on the military and social programs.

Obama said at a press conference he was open to compromise but would not sign a deal that would extend tax cuts to the rich just to avoid the fiscal cliff. He said several times that his final four years in office will be dedicated to helping to solidify the middle class and aiding those who strive to become part of it.

In a wide-ranging discussion of economic issues, climate change, Syria, Iran and the investigations surrounding the sex scandals involving former CIA director David Petraeus and General John Allen, he reiterated what he proposed last week when he said that he is ready immediately to sign an agreement that will extend the Bush tax cuts to the middle class.

He noted that the Senate has already passed a law like this and the Democrats in the House of Representatives support it.

“I’m hoping that the Republicans are ready to come on board too,” he said. “We should not hold the middle class hostage while we debate tax cuts for the wealthy.”

He said his proposal would assure that taxes will remain the same for 98 per cent of Americans and 97 per cent of small businesses.

“Half of the danger to our economy is removed by that single step and what we can then do is shape a process whereby we can look at tax reform which I am very eager to do,” he said.

Republicans have so far shown no interest in taking Obama up on his challenge, insisting that the Bush tax cuts remain the same but that tax loopholes and entitlements are eliminated for the wealthy.

Obama said this will not be enough to reach his goal to increase revenue by $1.5 trillion dollars to help reduce the ballooning trillion-dollar federal deficit.

He also said that there is always the possibility that America could go over the fiscal cliff if the Republicans remain “stubborn” and hold to their opposition to tax increases for people who earn more than $250,000 a year.

Economists and politicians agree that if the fiscal cliff is not avoided the American GDP could decline up to four per cent driving the economy into recession.

Obama promised further steps to dent the impact of climate change, but he said that he will not take any action that will harm economic and job growth.

Over the next few months, he said, he plans to meet with scientists, engineers and elected officials to discuss ways to combat climate change.

“The temperature around the globe is increasing faster than it was even 10 years ago,” Obama said. “We do know that the Arctic ice cap is melting faster than it was even five years ago. We do know that there have been extraordinarily large numbers of severe weather events here in North America but also around the globe. And I am a firm believer that climate change is real, that it is impacted by human behaviors and carbon emissions. And I think we have an obligation to future generations to do something about it.”

His statements may not bode well for the proposed Keystone XL pipeline that will bring bitumen from Alberta’s oilsands to the southern United States. Critics say extracting bitumen from the oilsands results in greater carbon emissions than extraction traditional crude oil sources and could negate the fuel efficiency standards that Obama imposed during his first term in office.

He promised an education campaign that would help develop long term actions “to make sure that this isn’t something that we are passing onto next generations that will be very expensive and very painful to deal with.”

He said that taking on climate change “in a serious way would involve taking on some tough political choices” and added that the cost of doing nothing would be great.

Obama said that he has no evidence that there has been any national security breach relating to the sex scandals surrounding Petraeus and Allen, who is commander of the International Security Assistance Force in Afghanistan.